Tilly’s reports difficult Q4, comparable sales decrease 8.8 percent

Tilly’s net sales were 173 million dollars in the fourth quarter, a decrease of 7.3 million dollars or 4.1 percent, while comparable net sales, including both physical stores and e-commerce decreased by 8.8 percent.

Full year net sales were 623.1 million dollars, a decrease of 49.2 million dollars or 7.3 percent, while comparable net sales, including both physical stores and e-com, decreased by 10.6 percent.

The company’s comparable net sales through March 12, 2024, decreased by 13.4 percent

"Our business currently faces many headwinds from the macro environment. Despite these headwinds, we are challenging ourselves to improve our business performance by carefully reconsidering everything we do," said Hezy Shaked, the company’s co-founder and interim president and CEO.

Review of Tilly’s Q4 results

The company’s net sales from physical stores were 125.6 million dollars, a decrease of 9.5 million dollars or 7 percent, with a comparable store net sales decrease of 11.8 percent. Net sales from physical stores represented 72.6 percent of total net sales.

Tilly’s ended the fourth quarter with 248 total stores.

Net sales from e-com were 47.4 million dollars, an increase of 2.1 million dollars or 4.7 percent. E-com net sales represented 27.4 percent of total net sales.

Gross profit was 46.7 million dollars or 27 percent of net sales, operating loss was 8.5 million dollars or 4.9 percent of net sales.

Net loss for the quarter widened to 20.6 million dollars or 69 cents loss per share. On a non-GAAP basis, this year's net loss was 5.2 million dollars or 17 cents loss per share.

Highlights of Tilly’s full year performance

Full year net sales from physical stores were 485.6 million dollars, a decrease of 45.5 million dollars or 8.6 percent, with a comparable store net sales decrease of 12.2 percent. Net sales from physical stores represented 77.9 percent of total net sales.

Net sales from e-com were 137.5 million dollars, a decrease of 3.7 million dollars or 2.6 percent. E-com net sales represented 22.1 percent of total net sales.

Gross profit for the year declined to 165.7 million dollars or 26.6 percent of net sales and operating loss was 31 million dollars or 5 percent of net sales.

Net loss was 34.5 million dollars or 1.16 dollars loss per share, while on a non-GAAP basis, net loss was 19.1 million dollars or 64 cents loss per share.

Tilly’s projects sharp decline in Q1 comparable sales

Based on current quarter-to-date comparable net sales results, the company currently estimates that its first quarter net sales will be in the range of approximately 109 million dollars to 119 million dollars, translating to an estimated comparable net sales decrease in the range of approximately 14 percent to 7 percent.

The company currently estimates pre-tax loss to be in the range of approximately 17 million dollars to 22 million dollars and loss per share for the first quarter to be in the range of 42 cents to 54 cents.

Tilly’s expects to have 247 stores open at the end of the first quarter, one store less compared to last year's first quarter. The company expects to invest around 15 million dollars, primarily for the construction of five new stores and continued upgrades to certain distribution and information technology systems.